The digital transformation in energy procurement is real.
But what can we expect?
What are the benefits from this innovation in the energy industry?
The digital transformation is a phenomenon that appears in every major industry sector. Even though, energy industry is one of the slowest in the process, it is now a necessity to embrace this new technology.
We are not only talking about having a transformation of the work in all companies, but being more efficient and supporting innovation of the way to purchase and manage energy. In this article, we will go through 6 advantages you can expect by embracing digital transformation in energy procurement.
A new approach to data
By digitizing energy operations, you have better data analysis in order to achieve the requirements to operational efficiency. You get powerful insights and it makes easier to handle your day-to-day activities such as audits, performance tracking, sourcing, compliance.
Moreover, if there is one thing energy procurement professionals can’t afford is risk factors due to a poor management in energy infrastructures. This is why, having a better approach to data allows you to improve decision-making, reduce vulnerabilities and therefore, risk factors.
According to a global industry analysis by 59% of enterprises using analytics in some capacity. And companies are capitalizing on this technology in several ways.
In fact, about 70% of global companies forecast that they will double down over the next couple of years on their investments in data and analytics capabilities.
A cost-effective solution
By embracing digital energy transformation, two parts of this industry need more innovation: administration and manual tasks. Indeed, it eliminates paperwork and potential long processes of administration. Also, the digital solution enhances productivity as electronic records help on a daily basis and can even filling up paperwork more quickly.
Moreover, you will avoid rework and errors that could be made by manual tasks. Indeed, it helps by the prevention of duplicate invoices, and it eliminates paper-based systems. Even though, making errors can happen, digital procurement allows you to avoid any troubles.
Better visibility of spending
Digital energy procurement transformation is game-changing when it is about tracking transactions, as it provides a visibility into day-to-day transactions. It gives a clear observation on requisitions, items purchased, orders processes and payments made as all of the information is centralised and is made available to management.
Moreover, digital energy management feeds your data so they can alert operators to potential issues and expects costs. You won’t have any surprise of a non-expected cost due to a poor vision of your financial data.
Better Data Quality
What about data quality and how important is that?
According to Harvard Business Review study, only 3% of companies’ data meets basic quality standards.
Managers might not care that much about data sometimes, they still have to work effectively and efficiently, and old say is: you can’t evaluate what you can’t measure, but what if you’re not in the position to measure everything in the most effective way and with great clarity.
As HBR states: bad data is a lens into bad work.
No data or no clear visibility, may be even worse.
In the end it’s all about making informed decisions, which is directly proportional to a great combination of effectiveness, knowledge and clarity, while at the opposite end we have wasted time and resources as actions are taken on abstract observations and incomplete data.
This new way of energy management will improve quality, oversight and traceability throughout the entire transaction. All of the digital energy transformation helps procurement team reduce costs by buying better and spending better thanks to a clearer visibility of what it is spent or need to be spent.
Better control of your business
Therefore, having a cost-effective solution and a better visibility of spending will bring to better control. This permanent vision of the energy activity will give you all the back and forth of your business.
Digital procurement solutions will value at risk and other metrics that could be an issue in your energy maintenance. This will make possible to prevent equipment failures and increase human safety. By controlling these essential aspects, you can keep up consistency all together.
In addition, this control can help to reduce common problems such as pricing mistakes, order duplication, inventory shortages and other supply problems. Therefore, digitalising all your energy procurement will show you what is happening in your data and monitor key performance indicators so you can run a better and effective business.
Better understanding of your industry
While the digital transformation makes procurement processes more effective than before, it also creates a new way of seeing opportunities. We know how important it is to be able to anticipate what your competitors could prepare. This is why, it is a necessity today to be aware of what is happening in the world.
Incorporating digital energy procurement solutions into your business will give you insights of how the market is evolving, what could impact your company and how you could manage your energy procurement. It can enable your company to partner faster with innovative suppliers and embrace new ways of working. Your digital procurement solution can help your company rethink your partnerships, talent, culture. And actually play a major role in shaping a company’s broader digital vision of how to evolve in the energy industry.
For the last decade, the energy sector is having a fast development. Changes are driven by competitors, energy efficiency, security improvement of the supply and digitalisation of daily activities. Therefore, all of them are a necessity to improve businesses in the energy procurement field.